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Below the Quote on Daily Market Commentary for July 21st 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Domestic equities are expected to remain range-bound amid continued geopolitical tensions in West Asia, Brent crude oil prices near US$90/bbl, weak rupee (around ?96.3/US$), persistent Foreign Institutional Investor (FII) selling and mixed global cues. While the ongoing Q1FY27 earnings season is expected to drive stock-specific action, investor sentiment will continue to be influenced by developments in West Asia and the trajectory of crude oil prices. Domestic equities extended losses for the second consecutive session, with the Nifty 50 declining 0.2% to close at 24,193, pressured by weakness in index heavyweights and higher crude oil prices. PSU Banks and Information Technology were among the key drags on the benchmark. Broader markets outperformed, with the Nifty Midcap 100 and Smallcap 100 advancing 0.3% and 0.5%, respectively. Sectorally, Chemicals, Cement and Auto were among the top gainers. The People's Bank of China kept its one-year and five-year Loan Prime Rates unchanged at 3% and 3.5%, respectively, marking the 14th consecutive month of steady rates and signalling a cautious approach to monetary policy. International Monetary Fund lowered India's FY27 GDP growth forecast by 10bps to 6.4%, while raising its FY28 estimate to 6.7%, citing elevated crude oil prices and the risk of a weaker monsoon due to El Niño as key downside risks.  Meanwhile, India's core infrastructure output accelerated to a five-month high of 5% YoY in June from 3.2% in May, supported by higher production of iron ore, cement and electricity, highlighting resilient industrial activity.  While cumulative rainfall remains 24% below the long-period average and kharif sowing is 6% YoY lower, rural demand has remained resilient, supported by improving July rainfall, healthy tractor demand and stable non-farm income. The weaker monsoon has primarily impacted rain-fed crops such as pulses and oilseeds, posing upside risks to food inflation. However, we maintain our FY27 CPI inflation forecast of 5.2% and expect RBI to keep policy rates unchanged through CY26, viewing the recent increase in food prices as a temporary supply-side shock. Investors will monitor the European Central Bank's monetary policy decision later this week for further cues on the global interest rate outlook, while any progress in US-Iran diplomatic efforts will remain a key monitorable. Key earnings scheduled for Wednesday include SRF, Eternal, Nestle India, JSW Energy, HPCL, Adani Power, Adani Green, Tata Comm. among others. In the primary market, SBI Funds Management made a strong debut, ending its first trading session with gains of around 6%. Primary market activity is expected to remain robust, with three mainboard IPOs—Lohia Corp, Indo-MIM and Xtranet Technologies—scheduled to open for subscription this week, with a combined issue size of approximately Rs 5,079 crore.

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